Once you get the hang of it and you want to use it to actually do work in your system, I'd say yellow or up, depends on what you're doing.
To do dream work effectively you'll first have to remember your dreams once you're awake. If you're one of those people that "never dreams" (like me), or you only remember one dream a week, or only if it's super exciting, or only for about ten minutes after waking up, no problem.
You can practice this very easily.
This is the thing you may have heard of before: you'll need to keep a dream journal.
All you do is put some paper and a writy thing (I find pencils are better because you can write upside down or sideways or in whatever funky position I end up waking up in) and some paper next to your bed so you can grab it once you wake up. Computers and phones are useful to keep a record once your paper gets full, but not so much as a first step because you're activating all kinds of motor functions and staring into a bright light, waking you up. You'll want to do this as asleep as possible, so before you even get up and have breakfast. If you can get into alpha and remain able to write, this helps a lot.
Memory of dreams is very fleeting, it's the first thing to get overwritten by new memories (like "I just got up, I just started brushing my teeth, I am eating cereal", etc.) so you want to keep it as intact as possible and write them down straight away.
Write down every detail you can think of, but don't worry if you can't remember much. My journal has dreams that are 3 pages long, and dreams that are literally "something about werewolves I think". don't worry about writing down the date, trying to remember what day it is will just make you more awake.
What this does is train your subconscious mind to remember dreams. It's telling it "Ok, I find dreams kind of important, see? So I'd like to remember them and not overwrite them immediately."
Once you can semi-consistently remember dreams, you're set for the next step.
What you can do by now:
With just this step you can do some dream work already. You can see patterns and recurring themes, and start interpreting your dreams and see what is keeping your subconscious busy. You can then use various awake techniques to work with that.
If you can remember your dreams, you'll find they're usually a lot like watching a very vivid movie. Most people at the start have no control over their dreams, at least not in the sense we're trying to achieve.
There are various tricks to achieve awakeness in dreams.
Look at your hands, that's definitely one.
Look at a digital clock and then look at it again.
Ask yourself "Am I dreaming right now?"
The last one I find the most useful, but it's really a matter of personal preference.
The trick is that each of these things, in order to do them in the dream... you'd need to be in control of your dream. But to do that, you need to do one of those things, but to do that... etc.
So the most useful thing here is to pick one of the tricks and do it a lot during the day. If you make it a habit to constantly ask yourself "Am I dreaming", or to always look at the clock twice, and so on, that habit will carry on into your dream.
Your hands will look strange in the dream, or the realisation of "I have hands!" will shock you into lucidity.
The numbers of the clock will appear garbled, or the time will be radically different both times.
You evaluate the situation and come to the conclusion that, well, there's elephants flying through the air and there's a monster. Probably dreaming then.
The first couple of times, this will jar you awake. But if you keep at it, you'll be able to keep dreaming, and take actions in the dream.
What you can do by now:
Pretty much anything. I find that if I do things that are TOO weird I still wake up (still can't fly).
Now you can do dream work! You can basically treat this like a deep alpha and do inner work, or castle work. The dream work part is not so difficult, it's really the getting there. While you're dreaming, similar to alpha (and other deeper states like theta) you are basically talking to your subconscious without your brain getting in the way - so you can use it to talk to child pieces, heal stuck emotions, fix your castle, address habits, and so on. You interface with it in the same way as you would in a very deep alpha. Your rational thoughts will be a bit muddled and slow, so it's very instinctual.
Don't forget to keep that journal even still.